D-Wave Quantum Inc. Form 8-K Summary
Report date: February 2, 2024; event date January 30, 2024. The filing reports a determination that certain previously issued financial statements and related disclosures should no longer be relied upon.
Business Context and Reporting Period
The issue relates to government assistance arrangements originated before 2021 that were structured as conditionally repayable loans with below-market interest rates. The affected filings include the annual periods ended December 31, 2020, 2021, and 2022; the nine-month period ended September 30, 2023; and the quarterly periods ended March 31, June 30, and September 30, 2023.
Financial Impact and Key Metrics
- The planned restatement primarily affects non-cash, non-operating components of other income or expense and net loss, research incentives receivable, and loans payable.
- Preliminary estimated decreases in non-operating, non-cash items included in other income or expense and net loss are approximately $0.4 million for the nine months ended September 30, 2023; $2.1 million for 2022; $10.8 million for 2021; and $12.0 million for 2020.
- Estimated increases in loans payable are $23.7 million as of September 30, 2023; $23.3 million as of December 31, 2022; $19.4 million as of December 31, 2021; and $0.3 million as of December 31, 2020.
- Estimated decreases in research incentives receivable are zero as of September 30, 2023 and December 31, 2022; $3.2 million as of December 31, 2021; and $11.7 million as of December 31, 2020.
- The filing states that reported loss from operations and total operating, investing, and financing cash flows are not affected.
- Bookings, average deal size, non-GAAP gross margin, non-GAAP gross profit, non-GAAP adjusted operating expenses, and non-GAAP adjusted EBITDA loss are not affected.
- The filing does not provide current revenue, profit, margin, cash balance, or liquidity figures beyond the preliminary restatement estimates.
Material Changes, Outlook, and Risks
- The Audit Committee determined that the affected financial statements and related communications should no longer be relied upon. The Company plans to amend its Form 10-K and the affected Forms 10-Q as soon as practicable.
- The accounting change eliminates previously recorded non-cash interest imputation and related income from government assistance. The Company concluded that the arrangements fall under U.S. GAAP guidance that precludes imputing interest where rates are affected by governmental restrictions or tax attributes.
- The preliminary estimates are unaudited and may differ materially from the final restated amounts.
- Management and the Audit Committee determined that the misstatements were unintentional and did not result from fraud or an attempt to deceive.
- The restatement does not affect financial covenant compliance, key business metrics, or employee compensation plans based on operating metrics.
- Risks include discovery of additional information, larger-than-expected adjustments, changes in the estimated impact, and delays in filing the amended reports.
Important Facts for Investors to Verify
- Confirm the final restated amounts in the amended Form 10-K and Forms 10-Q.
- Verify the final carrying values of loans payable and research incentives receivable.
- Assess any effect on reported net loss, accumulated deficit, and balance-sheet leverage after restatement.
- Review whether the Company identifies any additional accounting or internal-control implications.
- Confirm that operating cash flows, financial covenant compliance, and disclosed non-GAAP metrics remain unchanged.